A federal judge in Texas has reversed a Biden administration rule that wiped medical debt from credit reports, affecting nearly 15 million Americans.
The rule, which did not discharge debt but changed how credit scores could be calculated, would have removed $50 million of medical debt from credit reports.
U.S. District Judge Sean Jordan, who was appointed by President Donald Trump during his first term, argued in his decision that the Fair Credit Reporting Act does not allow the Consumer Financial Protection Bureau (CFPB) to remove medical debt from reports.
IANAL.
The judge is, mostly, correct from what I can tell. The FCRA explicitly allows the use of this information, as amended from a prior prohibition. He is correct in concluding that a blanket probition isn’t well supported within the statute’s boundaries. He is wrong in suggesting that the CFPB has no regulatory authority over the sharing medical details. The statute obviously semi-implicitly authorizes the CFPB to place some restrictions on how this information is shared, but the judge too-readily rejects these arguments. Not that the defendants made them particularly well, granted.
But… even setting aside the partially erroneous legal finding, it’s moot. Trump’s CFPB joined the plaintiffs in this case, agreeing to roll back the provisions. That the CFPB has the right to do so isn’t in question. Or well, the defendants argued it, but it’s not a good argument. They basically said that because they don’t agree with the change, the Court shouldn’t be allowed to permit it.
Congress needs to fix this, but obviously won’t.